Bitcoin has hit a record high, according to CNBC. From January to November of 2017, its market valuation increased from below $15 billion to an eye-opening $156 billion.
Which raises a very important question amongst some of us:
What in the actual hell IS Bitcoin and why should I care?
Okay that’s two questions. Part one: WTF.
Bitcoin is a decentralized digital currency. What that actually means is that it doesn’t belong to any particular country and only exists online. It also isn’t connected to any big banks, and for people who don’t trust the government or financial institutions – this is a big selling point.
Bitcoin is basically like it’s own little secret society. Bitcoins can be acquired and used as payment to anyone who chooses to accept them. It’s also worth noting that bitcoins (ie MONEY) can be created by everyday people (if they know how to crack source code).
It all sounds kind of shady and you might wonder why you’d even want to use Bitcoins over, say, your debit card to make an online payment. WELL.
You can transact online using bitcoin and receive payment instantly, because there’s no bank to verify the sender. There’s also hardly any transaction fees and zero potential for chargebacks because it’s not connected to a bank. It also eliminates situations like what happened in the subprime mortgage markets in 2007, when the banks literally retracted deposits. Bitcoin payments are 100% irreversible.
These are just some of the reasons why the secure-money-minded-public is going ape shit over bitcoin and its market valuation is so high. Which plays into the even weirder part of the story:
Nobody even knows who created Bitcoin. Supposedly it was this guy named Satoshi Nakamoto, but there’s no definitive proof as to who that is or if it is a group of people using that name. Hmmm. There are some theories that the personal Satoshi Nakamoto “handed the source code off” to “someone else” to manage, but the guy really handed it off to himself. Others think it’s someone in Japan, but Bitcoin was released in native English, so now they’re confused.
ANYWAY, back to our second question. Why in the seven hells should you care about Bitcoin?
If you’re one of the 96 percent of Americans with internet access who already shops online, you should care about Bitcoin. Especially if you make regular transactions or purchase things in different currencies.
Bitcoin wipes out currency conversion fees, so no more dollar to euro or yen and getting stuck with extra charges. Just Bitcoin to Bitcoin between buyer and seller. Kinda like going back to a good, old fashioned cash interaction between two people, except way less touchy feely.
Bitcoin cuts out the middlemen, so you don’t have to pay for any of the multiple intermediaries when making a card translation. No payment processor or card network fees, and no bank interactions causing delays, or taking their slice of the pie.
And since there are no third parties to identify and track transactions, you don’t pay tax on your bitcoin purchases, which lets you get one over the taxman for once. What you see is what you get with no nasty surprises at checkout.
The transaction fees are incredibly low since there’s no government involvement or tertiary institutions. And they happen in almost real time, as no one has to verify payment. So, if you need to pay for things on the fly or send money around the world faster, Bitcoin removes the old 2-3 days waiting time on bank transfers.
Another benefit of Bitcoin is that transactions are irreversible so, as a merchant, you never get stuck with a chargeback in the same way you do with credit cards. As a buyer, though you’d better be confident of where you’re sending your money, and careful with what you do with your bits, so to speak.
And it’s good news for you if you’re a drug trafficker, bank robber, hacker, or other lowlife criminal. Yep, the lack of regulation and anonymity of Bitcoin has made it a favorite for those wishing to carrying out dark deeds.
But hey, there’s still plenty of room for upstanding citizens. Bitcoin allows the movement of funds to be viewed by the public, so cryptocurrency is not completely at the mercy of criminals. And you wouldn’t ban fancy cars or dollar bills because they were used by criminals, so what’s wrong with a little bit of bit currency online?